Many global property markets are facing price corrections, and opinion is divided over whether the Dubai boom will, at some point in the not too distant future, come to an end.
Most property analysts are in agreement that slipping pices are inevitable, and most are welcoming of a slow down in speculation. But many large players in the property industry believe that these predictions are far too pessimistic, and urge us to take account of the fact that demand is not going to suddenly dissipate.
Last month Morgan Stanley released a report predicting a 10% fall in property prices by 2010. Then last week the investment bank EFG-Hermes - based in Egypt - stated property prices in Dubai are set to slide by 20% by 2011.
Although the industry concurs that these are tough times globally, however Dubai Land Department officials have stated that they believe any market slowdown will be much less severe. Sultan Bin Butti Bin Mejrin, DLD director general said recently 'In 2007, they said prices would go down. And the recent reports say prices will go down. But I said then it will be a very strong market. And it is,'
The regulatory authority in Dubai (RERA) remains optimistic. CEO Marwan Bin Galita said 'There will be a correction in some places but a correction in profit only. Rather than making 20% profit, maybe investors will make 5% profit. What have they lost?'.
'This situation is a healthy situation. Doubling your money in one or two months is not a situation driven by fundamentals but one that is driven by market psychology and excessive speculation,' said Marios Maratheftis. He added that 'Doubling your money in a couple of years is perhaps not going to be as easy. But the global economy has seen the strongest growth in more than thirty years and this is now changing.'
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